Abstract Agriculture in Ethiopia is primarily rain fed dependent, characterized by frequent failure of production. The study was conducted to examine the contribution of small scale irrigation on household income. The study employed both quantitative and qualitative approaches. Simple random sampling method was used to select three rural kebele administrations for the study. A total of 264 households were sampled using Kothari (2004) and a systematic sampling technique was employed to select the sample respondents from each sample kebele. Primary and secondary data sources were employed to collect the necessary data. Key informant interview, survey questionnaire and observation were the primary data sources for the study. Descriptive and inferential statistics were employed to analyze the collected data. Multiple regression model was employed to investigate factors contributing income difference of the household. The study revealed that the mean annual income of irrigation user households were higher than the non-irrigating household by about 55%. As the study showed, irrigation user households also obtained higher income from cash crop, cereal crop and livestock compared to non-irrigation user households. However, the mean annual incomes of irrigation user households’ non-farm and off farm activities are lower by Birr 6,619 per year. The multiple regression result indicated that sex of the household, accessibility of irrigation water, application of agricultural input, total size of cultivated land, total livestock holding, accessibility of credit, accessibility of extension service and participation on non-farm and off farm activity were statistically significant contributors of household income. This study has evidenced that irrigation participant households obtained higher income from farming as compared to their counterpart/non-user. Therefore, program designers, Alamata woreda administrative and funding agents should give attention on the construction of small scale irrigation so as to achieve the expected goal in the rural economy. Key words: Small Scale Irrigation, Annual Income, Rural Farm Household, irrigation User, Non-irrigator and Alamata woreda.